Paytm Share Price : Will it ever touch IPO price of Rs 2,150 again?
Paytm Share Price: What is happening?
Paytm share price has been on a falling spree ever since its IPO. The stock had made its debut on the exchanges with a 9% discount to its issue price of Rs 1,955 on November 18, 2021. The issue price for Paytm IPO was Rs 2,160.
In May this year, Paytm shares had plunged to a 52-week low of Rs 510.05 on BSE. The shares had wiped off over 76% of its mcap. Now, the stock has made some recovery, and is trading at around Rs 791 levels.
Quick fact: Paytm share price has been impacted the worst among tech-driven platform-based listed companies in India. The share price is down more than 64% from its issue price in November last year.
Let's deep-dive into Paytm share price movement:
What led to the fall in Paytm share price?
After its debut in November last year, Paytm share price came under pressure and fell to a record low of Rs 510 per share in May this year. Here are a few reasons behind the fall in share price:
- With central banks across the world fighting higher inflation, investors moved away from new-age loss-making growth stocks, to companies with more stable cash flows
- Paytm was among the hardest hit on fears that higher interest rates will continue to eat away at valuations that are based on profits expected to be delivered far into the future
- Analysts also pointed out that the company is working in too many segments, and the path to profitability remains uncertain.
What led to the recovery in Paytm share price?
Paytm share price has recovered from their 52-week low levels. The share made a smart recovery to Rs 791 per share on August 4th. Here are a few reasons behind the recent rally:
- Continued market share gains in digital payments
- Faster than expected scale-up of the lending business, resulting in an improving profitability profile
- Expectations of improvement in EBITDA margins and strong growth momentum in revenues
Paytm Share Price Insight
Out of 176 trading days that Paytm stock has been listed on exchanges, below are the Paytm share price movement insights:
- Paytm share price ended in green on 74 trading days
- Paytm share price ended in red on 102 trading days
Paytm Share Price : What's the latest?
Brokerages will be updating their share price target on Paytm post Apr-Jun 22 earnings on August 5th.
For other latest updates, check out the links:→
Should you Buy, Sell or Hold Paytm stock?
Goldman Sachs: Goldman Sachs has a target price of Rs 1,070 on Paytm, suggesting a 40% upside from current levels. Goldman Sachs noted that Paytm's January-March quarter results exhibited another quarter of strong and improving monetisation of the payments vertical. It also said that Paytm's "cash burn (situation) has been improving. The brokerage expects Paytm's revenue to grow by 90% as compared to last year in the April-June quarter with a 38% FY22-25E revenue compound annual growth rate (CAGR).
CLSA: Last week, CLSA initiated coverage on Paytm with a 'SELL' rating. CLSA noted that Paytm has a high-cost structure and inadequate revenue potential in its core payments business to cover that cost. While Paytm was well-placed to capture the digital payments trends, even after assuming a 19% gross merchandise value (GMV) compound annual growth rate (CAGR) till FY40 and core PAT margins will improve very marginally. CLSA has a target price of Rs 500 for the stock.
The stock recommendations in this blog are by the respective research analysts and brokerage firms. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.